trubble installing elgg

I have debian perfect setup. I am trying to install elgg. If I keep the .htacess file in the root dir the install gives me a 500 error. If I take out the file I can get to the install. What is in this file that is giving me trubble and how can I fix it? Thanks in advance.

Yes mod_rewrite is installed and enabled. It is elgg-0.9.2. I am trying to install. I see in the docs this.

HTML:

Your Apache configuration must have AllowOverride set to All for the directory where Elgg is installed.

How do I check this? Thanks. There are no errors in apache because I did not try to install without the.htaccess file and it will not bring up the install with it in the root. I am using Apache 2.2
New info...I was looking in the vhost for the site I am trying to setup elgg on and this is what is in there.

I must ad to this that i'm not installing the elgg to the root folder
"/var/www/www.website.com/web" but in a subdirectory
"/var/www/www.website.com/web/elgg" so I also placed "/data/" at "/www/data/".
Further I followed the How To.